More consolidation to follow ST-Ericsson, predicts analyst

LONDON  By grabbing a 19 percent market share of the key mobile phone silicon the recently announced 50-50 joint venture between ST-NXP Wireless and Ericsson Mobile Platforms (EMP) will put pressure on Freescale, Broadcom and Infineon and other suppliers with a limited customer base and relatively low market share, according to market research company Strategy Analytics.

"The STMicro and EMP joint venture creates a strong 3G player with a broad range of 3G platforms up its sleeve to challenge market leaders Qualcomm and TI. With the addition of EMP, this new company now boasts a strongproduct roadmap, which is important for remaining in the R&D-intensive and fast-moving cellular chip market," commented Sravan Kundojjala, an analyst at Strategy Analytics, in a statement.

Stuart Robinson, director of the handset component services part of Strategy Analytics, added, "The new joint venture between STMicro and EMP will create a clear number three player in the cellular semiconductor industry, with combined revenues of $3.6 billion. This equates to a 19 percent market share, behind leaders Qualcomm, 29 percent, and Texas Instruments, 28 percent. It puts further pressure on other small chip vendors to combine forces and fight for market share, or to be forced into niche market segments. We have definitely not seen the end of the consolidation just yet."